CEO of Top South Korean P2P Lender Accused of ‘Using Clients’ Funds to Buy Crypto’

The CEO of a leading South Korean P2P financial lender has been accused of using a client’s funds to make personal crypto purchases.

The South Korean news outlet NBN Media reported that an unnamed investor and private equity fund operator backed the CEO’s construction project.

South Korean P2P Lender Faces Lawsuit

But the investor reportedly never saw any interest payments, with the CEO instead pocketing the profits to pay for private crypto buys.

The investor says they have filed a civil lawsuit against the CEO. The same investor claimed that they had initially handed money over to the CEO in 2018, after seeing a posting on the latter’s P2P investment platform.

The posting advertised an opportunity to invest in a low-rise, multiple-unit residential building project in Incheon, one of South Korea’s biggest and most affluent cities.

Incheon, South Korea. (Source: Vincent van Zeijst [CC BY-SA 4.0])

Criminal Complaint

The investor said they initially “judged the project to be worthwhile.” However, they claim that “problems arose later.”

This allegedly became clear after the CEO asked the investor to “invest a further 100 million won [almost $70,000]” in the project.

The investor duly did so. But, they later “discovered that the funds they had transferred” were “not used to construct the building.”

Instead, they were used “for the CEO’s personal cryptocurrency investments,” the outlet wrote.

The news outlet wrote that the CEO “has returned the initial stake” and “some of the interest.”

However, the investor has signaled their intent to bring the CEO to “justice.” The investor was quoted as saying:

“For a famous domestic P2P site, promises made to customers should be the company’s top priority. But [the CEO] has broken these promises. This is a moral issue, regardless of whether the stake [has been] repaid. They have not yet provided an accurate explanation of [what happened to my funds].”

‘Act of Betrayal’

The investor added that the case was a “serious act of betrayal.”

The same media outlet wrote that the P2P company “has not responded to requests for fact-checking or rebuttals.”

It claimed that its reporters “visited the company’s office in Gangnam, Seoul, and left written inquiries.”

But the company, NBN Media wrote, has “remained silent on the matter.”

The investor said they would “reveal the truth about this clear case of embezzlement and customer deception.” They also signaled an intention to file a criminal complaint.

Earlier this week, media outlets reported that the Seoul Southern District Prosecutors’ Office-run Joint Investigation Unit for Virtual Asset Crimes will formally launch “in February at the earliest or in March at the latest.”